Short-Term Savings Opportunities
REM #F757
By Ilyce R. Glink
Summary: A ThinkGlink reader is wondering about investment opportunities for money that he hopes to use as a down payment on a home. Ilyce explains about various short-term investment opportunities.
Q: I have $100,000 that I am going to be using for a down payment on a house,
but I won’t need the cash for 3 to 9 months.
Should I put the money in a 3-month CD and continue to roll it over until I need it or should I choose a longer-term CD. Which one will pay the most interest?
A: Since you’re not sure when you’ll need the cash, I’d put
it into the 3-month CD and roll it over until you need it. The difference in
interest between a 3-month and 6-month CD isn’t much, and this way, your
cash will be accessible.
The other option is to find an online bank account that is paying almost as
much as a CD. At INGdirect.com, an Orange
savings account was paying 4.5 percent at press time, and your cash would be
fully available to you. Some mutual fund companies’ cash accounts are
paying even higher amounts, although that amount fluctuates from week to week.
You can search for savings account information at BankRate.com.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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